The WACC of Hornbach Holding AG & Co KGaA (HBH.DE) is 5.4%.
Range | Selected | |
Cost of equity | 5.9% - 9.2% | 7.55% |
Tax rate | 23.8% - 25.2% | 24.5% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.5% - 6.3% | 5.4% |
Category | Low | High |
Long-term bond rate | 2.8% | 3.3% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.62 | 0.9 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.9% | 9.2% |
Tax rate | 23.8% | 25.2% |
Debt/Equity ratio | 1.04 | 1.04 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.5% | 6.3% |
Selected WACC | 5.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HBH.DE | Hornbach Holding AG & Co KGaA | 1.04 | 1.03 | 0.58 |
ALBOU.PA | Bourrelier Group SA | 0.44 | 0.34 | 0.25 |
ALMRB.PA | MR Bricolage SA | 0.93 | 0.19 | 0.11 |
BMAX.ST | Byggmax Group AB | 0.81 | 0.69 | 0.43 |
CLAS B.ST | Clas Ohlson AB | 0.1 | 0.58 | 0.54 |
HBM.DE | Hornbach Baumarkt AG | 1.19 | 1.36 | 0.71 |
KGF.L | Kingfisher PLC | 0.46 | 0.73 | 0.54 |
PDG.L | Pendragon PLC | 0.67 | -0.2 | -0.13 |
SAMS.PA | Samse SA | 1.16 | 0.42 | 0.23 |
TPT.L | Topps Tiles PLC | 1.46 | 0.37 | 0.18 |
Low | High | |
Unlevered beta | 0.24 | 0.47 |
Relevered beta | 0.43 | 0.85 |
Adjusted relevered beta | 0.62 | 0.9 |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for HBH.DE:
cost_of_equity (7.55%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.